ZenithOptimedia has downgraded its global ad spend forecast from 4.6% growth this year to 4.2%, in the light of the “devastating earthquake” in Japan and the political turmoil in the Middle East playing out on the world stage.

The Publicis Groupe-owned global media agency indicated that “these events had immediate consequences for advertising in the affected markets” and pared its 2011 ad spend forecast to $471 billion.

In Egypt – by far the largest ad market to be caught up in the Middle Eastern uprisings – ZenithOptimedia said “there was almost no advertising on TV during the revolution,” and in the aftermath, advertisers have been very careful about the content and placement of their messages.

The network also recorded that Japanese broadcasters replaced almost all commercial ad slots with public service announcements for weeks after the earthquake, and blackouts and distribution problems will hinder media consumption for months to come.

The agency said it did not expect these shocks to derail the global recovery in the long term. However, it expects some of the missing advertising to reappear later in the year, followed by strong growth in these markets in 2012 thanks to the easy comparison with the first quarter of this year.

Japan is forecasted to shrink 4.1% this year, then grow 4.6% next year, while Egypt follows this year's 20% drop with a 12.1% recovery in 2012.

The agency has increased its 2012 forecast from the 5.2% it indicated in December to 5.8%.

This, it said, is partly the result of the expected rebound in Japan and the Middle East, and partly thanks to further strengthening in Western and Central and Eastern Europe, where advertisers are becoming “more confident of the long-term economic prospects.”

The agency said the large disparity in growth rates between developed and developing markets will continue.

It forecasted that North America will grow by an average of 3.1% per year between 2010 and 2013, and Western Europe will grow by 3.5%.

Japan will grow just 0.7% a year, though this obscures the big drop in 2011 followed by the recovery of lost ground over the next two years, according to ZenithOptimedia.

It also forecasted just 0.1% annual growth in the Middle East, as advertisers tread carefully amid political instability. However, Latin America is set to grow by 8.2% a year, Central and Eastern Europe by 12.4%, Asia Pacific by 6.6%, and Asia Pacific, excluding Japan, to grow by 10.2%.

Developing markets – which it defined as everywhere outside North America, Western Europe and Japan – will increase their share of the global ad market from 30.9% in 2010 to 35.1% in 2013.

ZenithOptimedia said there are two “developing” markets in the world's top 10 ad markets, but there will be three in 2013. China, which it forecast will grow at an average 13.6% a year to 2013, will overtake Germany, which will grow at an average 2.4%, to become the world's third-largest ad market in 2011 and stay at that position throughout the forecast period.

China is just over half (54%) the size of Japan, the second-largest ad market, and will be just over three-quarters (77%) of its size in 2013.

Brazil, with 15.4% annual growth, will overtake France, with 2.9%, to take sixth place in 2011. Russia (23.3% growth) will rise from 12th place in 2010 to 10th in 2011, eighth in 2012 and then seventh in 2013.

The agency said that the sheer size of the US – 3.5 times the next-largest market – means it will contribute the most new ad dollars to the global market over the next three years ($14.2 billion), despite its slow growth.

However, the next five-largest contributors are all developing markets: China, which contributes almost as much as the US ($10.8 billion), Russia ($6.9 billion), Brazil ($3.3 billion), India ($2.5 billion) and Indonesia ($2.4 billion).

Overall, developing markets will contribute 62% of new ad dollars over the next three years.

ZenithOptimedia also expects the Internet will overtake newspapers to become the world's second-largest advertising medium in 2013. The agency indicated that this is the first time this has fallen within its forecast period.

Newspaper ad expenditure was still 51% larger than Internet ad expenditure in 2010, but newspaper expenditure is shrinking by 1.4% a year as circulations continue to fall in developed markets, and readers migrate to the Internet.

Internet advertising continues to grow at “breakneck pace,” at a forecast average rate of 14.4% a year between 2010 and 2013.

The agency forecasted that newspaper ad expenditure will fall from $95.2 billion in 2010 to $91.2 billion in 2013, while Internet ad expenditures rise from $63 billion to $94.5 billion in the same period.

This year, display advertising took over from search as the main driver of Internet ad growth, according to the agency.

Display, broadly defined to include online video and social media, has been invigorated by fast-growing sectors, said ZenithOptimedia.

The agency said that affordable, do-it-yourself tools to create streaming video ads have opened online video to small and local advertisers.

Social media sites are also attracting huge audiences though click-through rates, and therefore costs are often very low. ZenithOptimedia said it expects global display ad expenditure to grow at an average of 16.4% a year to 2013, while paid search grows by 12.8% and classified by 10.2%.

TV is by far the largest medium, and continues to increase its market share. TV attracted 40.4% of global ad expenditure in 2010, up from 37.3% five years earlier, and is expected to account for 41.7% in 2013.

Bigger and higher-quality displays and more channels delivered by digital networks mean more people are watching TV than ever, according to the agency network.

It forecasted that global TV ad expenditure will rise from $180.3 billion in 2010 to $216 billion in 2013.

MediaWeek is the sister publication of Direct Marketing News. Both are owned and operated by Haymarket Media.